Case Study Description of Backyard Pub: Inflatable Ideas
In April 2017, a third year student at Western University was contemplating launching a new business, Backyard Pub. The company would rent inflatable pubs and party supplies to individuals planning outdoor summer gatherings across Southwestern Ontario. This start-up enthusiast needed to evaluate his product offering and marketing strategy in addition to projecting the new venture's financial performance for the first three years of operations. Was there a market for this product? What target demographic would buy into this product? Where was the best place to market Backyard Pub?
Swot Analysis of "Backyard Pub: Inflatable Ideas" written by Jessica Bond, Ian Dunn includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Backyard Pub facing as an external strategic factors. Some of the topics covered in Backyard Pub: Inflatable Ideas case study are - Strategic Management Strategies, Budgeting, Entrepreneurship, Marketing and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Backyard Pub: Inflatable Ideas casestudy better are - – increasing transportation and logistics costs, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion,
talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Backyard Pub: Inflatable Ideas
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Backyard Pub: Inflatable Ideas case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Backyard Pub, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Backyard Pub operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Backyard Pub: Inflatable Ideas can be done for the following purposes –
1. Strategic planning using facts provided in Backyard Pub: Inflatable Ideas case study
2. Improving business portfolio management of Backyard Pub
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Backyard Pub
Strengths Backyard Pub: Inflatable Ideas | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Backyard Pub in Backyard Pub: Inflatable Ideas Harvard Business Review case study are -
Training and development
– Backyard Pub has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Backyard Pub: Inflatable Ideas Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Effective Research and Development (R&D)
– Backyard Pub has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Backyard Pub: Inflatable Ideas - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Backyard Pub has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Highly skilled collaborators
– Backyard Pub has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Backyard Pub: Inflatable Ideas HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Backyard Pub in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Backyard Pub is one of the leading recruiters in the industry. Managers in the Backyard Pub: Inflatable Ideas are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Backyard Pub: Inflatable Ideas firm has clearly differentiated products in the market place. This has enabled Backyard Pub to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Backyard Pub to invest into research and development (R&D) and innovation.
Ability to lead change in Innovation & Entrepreneurship field
– Backyard Pub is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Backyard Pub in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Backyard Pub
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Backyard Pub does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Backyard Pub has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Backyard Pub has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Operational resilience
– The operational resilience strategy in the Backyard Pub: Inflatable Ideas Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High brand equity
– Backyard Pub has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Backyard Pub to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Backyard Pub: Inflatable Ideas | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Backyard Pub: Inflatable Ideas are -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Backyard Pub supply chain. Even after few cautionary changes mentioned in the HBR case study - Backyard Pub: Inflatable Ideas, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Backyard Pub vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Backyard Pub: Inflatable Ideas, in the dynamic environment Backyard Pub has struggled to respond to the nimble upstart competition. Backyard Pub has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Backyard Pub products
– To increase the profitability and margins on the products, Backyard Pub needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Backyard Pub, firm in the HBR case study Backyard Pub: Inflatable Ideas needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Backyard Pub is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Backyard Pub: Inflatable Ideas can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Backyard Pub: Inflatable Ideas, is just above the industry average. Backyard Pub needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Backyard Pub: Inflatable Ideas has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Backyard Pub 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Backyard Pub: Inflatable Ideas, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Jessica Bond, Ian Dunn suggests that, Backyard Pub is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Aligning sales with marketing
– It come across in the case study Backyard Pub: Inflatable Ideas that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Backyard Pub: Inflatable Ideas can leverage the sales team experience to cultivate customer relationships as Backyard Pub is planning to shift buying processes online.
High cash cycle compare to competitors
Backyard Pub has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Backyard Pub: Inflatable Ideas | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Backyard Pub: Inflatable Ideas are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Backyard Pub can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Backyard Pub can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Backyard Pub can use these opportunities to build new business models that can help the communities that Backyard Pub operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Backyard Pub is facing challenges because of the dominance of functional experts in the organization. Backyard Pub: Inflatable Ideas case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help Backyard Pub to increase its market reach. Backyard Pub will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Low interest rates
– Even though inflation is raising its head in most developed economies, Backyard Pub can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Backyard Pub in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Backyard Pub can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Backyard Pub can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Backyard Pub: Inflatable Ideas, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Backyard Pub to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Backyard Pub can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Backyard Pub to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Backyard Pub to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Backyard Pub can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Building a culture of innovation
– managers at Backyard Pub can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Innovation & Entrepreneurship segment.
Threats Backyard Pub: Inflatable Ideas External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Backyard Pub: Inflatable Ideas are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Backyard Pub business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Backyard Pub
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Backyard Pub.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Backyard Pub.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Backyard Pub: Inflatable Ideas, Backyard Pub may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Environmental challenges
– Backyard Pub needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Backyard Pub can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Backyard Pub in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Backyard Pub needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Consumer confidence and its impact on Backyard Pub demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Backyard Pub will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Backyard Pub in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Backyard Pub can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Backyard Pub: Inflatable Ideas .
Weighted SWOT Analysis of Backyard Pub: Inflatable Ideas Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Backyard Pub: Inflatable Ideas needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Backyard Pub: Inflatable Ideas is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Backyard Pub: Inflatable Ideas is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Backyard Pub: Inflatable Ideas is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Backyard Pub needs to make to build a sustainable competitive advantage.